Do Hedge Funds Love Hugoton Royalty Trust (HGT)?

After several tireless days, we have finished crunching the numbers from more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Hugoton Royalty Trust (NYSE:HGT).

Is Hugoton Royalty Trust (NYSE:HGT) the right pick for your portfolio? The best stock pickers are taking a bearish view. The number of long hedge fund bets were trimmed by 2 in recent months. Hugoton Royalty Trust (NYSE:HGT) was in 5 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with Hugoton Royalty Trust (NYSE:HGT) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Hardinge Inc. (NASDAQ:HDNG), Provectus Biopharmaceuticals Inc (NYSEMKT:PVCT), and ArQule, Inc. (NASDAQ:ARQL) to gather more data points.

In the 21st century investor’s toolkit, there are tons of indicators stock market investors use to size up their stock investments. A duo of the best indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the broader indices by a very impressive margin (see the details here).

With all of this in mind, let’s go over the new action surrounding Hugoton Royalty Trust (NYSE:HGT).

Hedge fund activity in Hugoton Royalty Trust (NYSE:HGT)

Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 29% from the second quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, MFP Investors, managed by Michael Price, holds the biggest position in Hugoton Royalty Trust (NYSE:HGT). MFP Investors has a $0.4 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $0.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include Matthew Tewksbury’s Stevens Capital Management, Israel Englander’s Millennium Management, and Matthew Hulsizer’s PEAK6 Capital Management.

Due to the fact that Hugoton Royalty Trust (NYSE:HGT) has faced a declining sentiment from the smart money, it’s safe to say that there were a few hedgies who were dropping their positions entirely heading into Q4. Intriguingly, Renaissance Technologies cut the largest stake of the “upper crust” of funds monitored by Insider Monkey, totaling close to $0.2 million in stock, and Chao Ku’s Nine Chapters Capital Management was right behind this move, as the fund dropped about $0.1 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Hugoton Royalty Trust (NYSE:HGT). These stocks are Hardinge Inc. (NASDAQ:HDNG), Provectus Biopharmaceuticals Inc (NYSEMKT:PVCT), ArQule, Inc. (NASDAQ:ARQL), and Rentech, Inc. (NASDAQ:RTK). This group of stocks’ market caps is the closest to Hugoton Royalty Trust (NYSE:HGT)’s market cap.

As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $1 million in Hugoton Royalty Trust (NYSE:HGT)’s case. ArQule, Inc. (NASDAQ:ARQL) is the most popular stock in this table. On the other hand, Provectus Biopharmaceuticals Inc (NYSEMKT:PVCT) is the least popular one with only 4 bullish hedge fund positions. Hugoton Royalty Trust (NYSE:HGT) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, ArQule, Inc. (NASDAQ:ARQL) might be a better candidate to consider a long position.